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African countries cautioned to wake up on sleeping ecommerce

12 December, 2020
African countries cautioned to wake up on sleeping ecommerce

Yaounde, 12 December 2020 (ECA) – As African countries, in general and those in Central Africa in particular, gear up towards going-live with the African Continental Free Trade Area (AfCFTA) in January 2021, they must tidy-up smart strategies for ecommerce, without which they would lose out considerably on the promise of the fourth industrial revolution – a scenario which is simply not acceptable.

Economists, digital economy policy specialists, entrepreneurs and a range of other stakeholders came to this conclusion, Friday, after a three-and-a-half hour online exchange on the theme: “Maximizing intra-African trade in the context of AfCFTA: the role of e-Commerce and the private sector.” 

It was jointly convened by the African Trade Policy Centre (ATPC) of the UN Economic Commission of Africa (ECA) and the Commission’s Subregional Office for Central Africa, in collaboration with the Commission of the Economic Community of Central African States (ECCAS).

Ecommerce, which is the monetary exchange of goods, services and information products via the Internet, will be a key component of phase two negotiations of the AfCFTA. It is therefore a far more compelling item to boost intra-African trade than various stakeholders in the ecosystem seem to fathom.

Africa’s share in the global US$3.4 trillion dollar ecommerce ecosystem, is only 1.3%, said Giuseppe D’Aronco – ICT policy economist at ECA’s Central Africa Office.

“Just over 18% of people in Central Africa have access to the internet at this stage which is far below the global average of 48.6%” D’Aronco pointed out as he outlined the binding constraints to e-commerce in the subregion.

However, he noted, there is a great sense of political will from some member States in the subregion, such as Gabon – with a 50.32 general internet penetration rate. Moreover, 54% of Gabonese shopped online last year putting them ahead of Rwanda where 39% of citizens did similar transactions. In the rest of the subregion, the figure was less than 30%.

Things ought not to be so, argued Mamadou Bal, another Economist at ECA’s Central Africa Office, adding that if anything “the AfCFTA and the movement to building forward better from a delicate COVID-19 experience offer the potential to change the context in which industries in Central Africa produce and export, notably through integrated value chains that make use of clean and resource-efficient production technologies.”

It goes without saying that electronic means of buying and selling offer an opportunity to integrating higher and profitable value chains.

David Mudilo an e-entrepreneur from the Democratic Republic of Congo (DRC), for instance, who runs the marketplace, said in his experience,  the practice of payment-upon-delivery for items whose orders are placed online, generates hidden costs for e-merchants related to the transport and storage of undelivered items. 

He said other entrepreneurs need to find a solution to this in Africa, hence broadening the value chain around classical e-commerce.  He reasoned that one way out is to develop a network of relay points for electronically ordered products, adding that various smart payment options such as the use of bank cards, mobile money and cash collected at the relay points could be pooled.

“With these kinds of logistical and systemic difficulties that have resulted in the closure of some e-commerce giants in Central Africa such as AfriMarket, Cdiscount and  Jumia, the continent must build its own e-commerce model which takes into account its unique needs and operating modes that are different from those elsewhere,”  harped Giuseppe D'Aronco in support of the above proposition.

Ms. Angela Ndambuki, Regional Director for Sub-Saharan Africa of the International Federation of the Phonographic Industry (IFPI) concurred, while adding that e-commerce is a key enabler of trade in services which African countries should actively promote as it scales up the profits of small and medium-scaled enterprises (SMEs) and IP-dependent sectors such as audiovisual and recorded music industry.

Some of the key strategies to address constraints to ecommerce in Africa in general were listed as:

  • Increasing connectivity to and the reliability of internet access
  • Developing Africa-specific digital payment systems
  • Promoting investment in e-commerce services and start-ups
  • Formulating and adopting solid e-commerce regulations (Rwanda has full legalization)
  • Mending logistics which accompany ecommerce, such as mail distribution and parcel storage systems and delivery routes
  • Improving country business climates

Adama Coulibaly, Head of the Special Initiatives Section of ECA’s Subregional Office for Africa who opened the online debate, said the conversation on ecommerce, in the context of Africa’s free trade regime, must be paid key attention as it will enhance medium and long-term economic resilience by maximizing trade, driving innovation and job creation and engendering general economic and social développement.



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